August 19th - Show Materials & Top 3 Things

Welcome back! You can enjoy today's The Macro Show with Senior Macro analyst Darius Dale and Director of Sales Daryl Jones HERE and access the associated slides (once they become available) HERE.

hedgeye's top 3 things

Below are the top three things from Hedgeye CEO Keith McCullough’s Macro Notebook this morning:

1) VOLATILITY – Our signaling #process (the vol of vol) suggests it will be hard to hold front-month VIX below 15 anytime soon. You’ll also have an implied volatility DISCOUNT of -10% (vs. 30-day realized) in SPY on the open, so we like anything around 2927 SPX (top-end of our range) as a spot to lay out all the index shorts we covered on red last week.

2) CURVE – Macro Tourists nailed it (again!) panicking about 10s/2s inversion last week (after panicking about the Yuan 3 weeks prior); don’t do that – measure and map The Cycle within the context of The Curve and you’ll see that +10bps wide on 10s/2s confirms #Quad4 in Q3, regardless (that spread was +30bps in July!).

3) FINANCIALS – Its hard to pick a “favorite”, but U.S. Bank Stocks (KRE) will be at the top of our short-selling list on this morning’s FOMO open. Implied volatility closed at a -12% DISCOUNT (vs. 30-day realized) in the XLF on Friday; BAC is still our favorite “stock” to stay with on the short side in large cap Fins (vs. V or MA long); buying more Gold exposure on the other side of that.

The Macro Show Schedule

Below is the lineup for this week, if you are unable to tune-in live and have a question for the team you can submit it HERE.

Monday, August 19th - Senior Macro analyst Darius Dale and Director of Sales Daryl Jones Tuesday, August 20th - Energy analyst Alec Richards, Director of Sales Daryl Jones, and Senior Macro analyst Darius Dale  Wednesday, August 21st - Technology analyst Ami Joseph, Director of Sales Daryl Jones, and Senior Macro analyst Darius Dale  Thursday, August 22nd - Communications analyst Andrew Freedman, Energy analyst Alec Richards, and Senior Macro analyst Darius Dale   Friday, August 23rd - Cannabis analyst Shayne Laidlaw, Director of Sales Daryl Jones, and Senior Macro analyst Darius Dale

In Case You Missed It 

Dale: The 'Black Hole Of Risk' Is Here

Our Senior Macro analyst Darius Dale explains in the clip HERE that the global economic data continues to slow – at a faster rate – and it’s beginning to “seep over into the U.S.”

“We’re going to get the worst data since the cycle started slowing last year in the next three months,” Dale explained last week on The Macro Show. “Investors haven’t had to deal with that yet. What’s now happening to bond yields is they’re saying, ‘Oh no, the data is getting worse at its fastest pace and the Fed hasn’t done enough to ease. The ECB hasn’t done enough to ease. The PBOC is moving in the wrong freaking direction! They’re tightening.’ This could get hairy in a hurry. This is the black hole of market risk we’ve been talking about for months now. Pay attention.”